Square mobile payments hits 1 million merchants milestone

Square announced today via Twitter that there are now more than 1 million merchants using its mobile payment services to accept credit cards. The startup has been competing against heavyweights like PayPal, Google, and Intuit in helping small businesses process payments via their mobile phones.

“Just as small businesses are growing with Square, we’re growing with them: Over 1 million merchants now accept credit cards,” said the company in a tweet. And in response, Co-founder Jack Dorsey tweeted, “To put that in perspective: there are only 8 million merchants who accept credit cards in the US.”

Since debuting in 2009, Square has seen tremendous growth, most recently reporting a signup rate of 30,000 to 50,000 new merchants each month. It has shipped 800,000 card readers to merchants and processes $2 billion in payments a year.

Square’s latest offering is a hands-free payment feature using its Card Case app for iOS 5. As more small businesses accept Square, more users may also adopt the Card Case app. However, Square will face tough competition from NFC-based mobile payment systems such as Isis and Google Wallet, which has an additional component of delivering local deals.